Property investment rating system and method

ABSTRACT

A property investment management tool comprises user interface logic and an investment rating engine. The user interface logic is configured to provide a user interface accessible to a user and includes risk profile configuration interface logic configured to permit a user to define a plurality of different risk profiles for a plurality of different investments. The investment rating engine is coupled to the user interface logic and is configured to evaluate the plurality of different investments according to the plurality of different risk profiles.

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a Continuation of U.S. application Ser. No.11/026,433, filed Dec. 30, 2004, incorporated herein by reference in itsentirety, which claims priority from Provisional Application No.60/533,566, filed Dec. 31, 2003, incorporated herein by reference in itsentirety and which claims priority from Provisional Application No.60/533,548, filed Dec. 31, 2003, incorporated herein by reference in itsentirety.

This application is related to “System and Method for Managing DataPertaining to a Plurality of Financial Assets for Multifamily andHousing Developments” U.S. application Ser. No. 11/026,102, filed Dec.30, 2004, and hereby incorporated by reference.

BACKGROUND

The present invention relates generally to property investment ratingsystems and methods. More specifically, the present invention relates toa system and method for managing a large portfolio of property-relatedinvestments or potential investments based on pre-determined criteriasuch as risk and financial performance.

Multifamily housing refers to housing that is subdivided into five ormore independent units. Each unit is configured to house a person or agroup of people, herein referred to as residents. The number of units ina multifamily housing property can vary from a relatively small numberof units to a relatively large number of units.

Often, the residents of a unit in a multifamily property are not theowners of the individual unit or the multifamily property. The residentsof the unit pay rent to the owner of the multifamily property for theright to reside in the unit. The rent provides a stream of income to theowner of a multifamily property. The amount of income is the aggregateof the rent received from each of the residents in the multifamilyproperty such as parking fees, laundry fees, retail space rental, and/orvarious subsidies.

Because the amount of money involved in purchasing multifamily propertyis often high, most potential purchasers do not purchase the multifamilyhousing property outright. Rather, the potential purchasers obtainfinancing, e.g., in the form of debt, equity or bond investments frominvestors. Investors in such financing arrangements may develop largeportfolios of investments in multifamily housing. Managing theseportfolios can become difficult for the investor as the total number ofloans and/or the total dollar amount of the loans increases. In order toallow investors to manage their investments, it is desirable forinvestors to have tools to help monitor such things as the propertyfinancials, property condition, markets, etc. for the underlyingproperties.

Accordingly, it would be advantageous to provide a system that providestools for monitoring the performance of a portfolio of investmentproperties. It would also be advantageous to provide a system thatprovides an intuitive rating system for characterizing property relatedinvestments. It would also be advantageous to provide an automatedsystem to evaluate potential investments in properties.

It would be advantageous to provide an investment rating system or thelike of a type disclosed in the present application that provides anyone or more of the these or other advantageous features. It should beunderstood, however, that the systems/methods disclosed herein may alsobe used to achieve different and/or additional advantages, withoutnecessarily achieving the advantages described herein.

SUMMARY

One embodiment relates to a multifamily investment management tool whichcomprises user interface logic and an investment rating engine. The userinterface logic is configured to provide a user interface accessible toa user and includes risk profile configuration interface logicconfigured to permit a user to define a plurality of different riskprofiles for a plurality of different investments. The investment ratingengine is coupled to the user interface logic and is configured toevaluate the plurality of different investments according to theplurality of different risk profiles.

Another embodiment relates to a multifamily investment management toolwhich comprises risk profile configuration interface logic, aninvestment rating engine, and workflow management interface logic. Therisk profile configuration interface logic is configured to permit auser to define a plurality of different risk profiles for a plurality ofdifferent investments. The investment rating engine is coupled to theuser interface logic and is configured to evaluate the plurality ofdifferent investments according to the plurality of different riskprofiles. The workflow management interface logic is configured toreceive output of the investment rating engine and is configured for useby an asset manager to manage workflow of the asset manager.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic representation of an investment rating system forprocessing investments according to an exemplary embodiment.

FIG. 2 is a flow chart depicting an investment rating process accordingto an exemplary embodiment.

FIG. 3 shows a display screen provided by a user interface for thesystem according to an exemplary embodiment.

FIGS. 4-26 show display screens provided by a user interface for thesystem according to exemplary embodiments.

DETAILED DESCRIPTION OF THE EXEMPLARY EMBODIMENTS

According to an exemplary embodiment, an investment rating system andmethod are provided to help or assist an individual and/or anorganization (e.g., an investor) monitor or rate investments based onpre-defined criteria. Various data relating to investments and/orproperties (such as property condition details, customer ratings, loandetails, property financials, in the case of mortgage loans) may becollected and evaluated according to risk analysis profiles which may beconfigurable according to the nature of the risks associated with aparticular investment. The data may be used to generate an overallevaluation of risk associated with an investment and/or to generateflags or trips associated with specific issues that raise concern. Inthe exemplary embodiment, the investment rating system and method may beused to help manage the workflow of asset managers and may be used tohelp asset managers prioritize their asset management and lossmitigation activities by identifying those properties that are at agreater risk for default. Additionally, the investment rating system mayalso generate investment rating output scores or values which may bereviewed by an asset manager and provided to other modeling systems(e.g., for early warning, loss forecasting, and so on).

Shown in FIG. 1 is a simplified schematic illustration of a system 10useable to implement an exemplary embodiment of an investment ratingsystem and method. System 10 may utilize various computer capabilities,hardware, software, electronic communications links, etc. System 10includes a computer server 110 having a processor 112. Server 110operates under the control of computer software shown as control files114. Server 110 is coupled to database 116 which may be used to store,among other data, records relating to a number of different investments.

Server 110 is configured to be electronically coupled to user interfacelogic 115. User interface logic 115 may be accessed by one or moredifferent types of users (e.g., authorized business users, assetmanagers, credit policy specialists, etc.). User interface logic 115preferably provides linked interactive display screens to such usersusing conventional input and display devices such as one or more desktopcomputers, laptop computers, and/or other computers 130 via electroniclinks. User interface logic 115 is configured to allow a user to accessto the investment rating engine 117 and the database 116 storingfinancial performance and other information pertinent to theinvestments. User interface logic 115 may be implemented using a database program (e.g., Microsoft Access), an Internet-enabled web-typeinterface, other commercially available user interface technologies, orother arrangements. According to various embodiments, different userinterfaces may be provided and system 10 may be accessed as part of alarger system.

According to one exemplary embodiment, server 110 may execute aninvestment rating engine 117 to monitor an investment portfolio. Theinvestment rating engine 117 may be executed on a single server (shownas server 110) or on separate logical servers or using separate physicaldevices. Although the investment rating engine 117 is shown as beingseparate from the server 110 and the computer 130, it will beappreciated that the investment rating engine (and the user interfacelogic) may be implemented by the server 110 (including the control files114) and/or by the computer 130. Likewise, although the financialperformance and related information is shown as being stored in thedatabase 116, it will be appreciated that this information could bestored elsewhere (e.g., computer 130) in addition to or instead of thedatabase 116. According to alternative embodiments, other engines may beprovided that provide other functionality.

In addition to storing the financial performance and other datapertinent to the investments, the database 116 also stores parametersused to configure different risk profiles for different investments orcategories of investments. Different risk profiles may be created tomore accurately reflect the risk characteristics associated with aparticular investment. For example, according to a preferred embodiment,a scoring system may be used in which the weighting for differentcategories and subcategories is defined based on perceived contributionto overall risk provided by each category/subcategory for thatinvestment. Additionally, different risk profiles may have differentranges such that the interpretation of a given value may vary fordifferent investments (e.g., for the same parameter, the range of valuesthat is considered “acceptable” or low risk may be defined differentlyfor different investments). Further, different risk profiles may becreated with different trip settings, so that trips occur underdifferent pre-defined scenarios for different investments or categoriesof investments. Other mechanisms for configuring risk profiles may alsobe employed.

I. Process Flow

Referring to FIG. 2, the investment rating engine 117 follows an overallprocess 200. The process 200 includes, at step 202, storing a riskanalysis framework for use in evaluating financial performance data andother information. As previously noted, and as will be described ingreater detail below, different risk profiles may be used which areconfigured to reflect the risk characteristics of different investments.In the exemplary embodiment, the different risk profiles are configuredresponsive to operator inputs received in connection with screendisplays shown in FIGS. 4-26, as described below.

At step 204, various data is collected that is used by the investmentrating engine 117 to evaluate investments. The data may be collectedfrom a variety of sources. For example, the data may be collected from acounterparty data source, such as a computer system associated with alender or property owner that electronically provides financialperformance information on a regular basis (e.g., annually, quarterly,or monthly). The data may also be collected from 3rd party market datasources, such as one or more computer systems that provide informationregarding property values for different geographic markets. The data mayalso be collected from internal systems, such as computer systemsassociated with asset managers that visit properties associated withindividual investments and provide/update data used by the investmentrating engine 117 to evaluate such investments.

In general, the data that is collected facilitates evaluating differenttypes of risk that may be encountered. For example, financialperformance data provides an indication of the financial health of agiven property and the likelihood of default. Other data is preferablyalso collected. For example, it may be determined that the riskassociated with a particular investment is likely to increase to theextent that the value of the property (or properties) serving ascollateral for the investment decreases. That is, if the property valuedecreases, the investor's risk may increase because the investor may beless able to recover its investment from sale of the property in theevent of foreclosure. Accordingly, data may be collected that is useableto assess property values of properties underlying individualinvestments. The disclosed data is merely exemplary of the types of datathat may be collected and used and other types of data targeted towardsevaluating other sources of risk may also be collected and used,depending on what risks are identified, what risks are consideredimportant, what risks have associated data that can be collected in apractical manner, and so on. For example, it may be desirable to obtaincredit information (e.g., Dun & Bradstreet, Moody's, etc.) for theproperty owner and/or the lender, so that the credit quality of thelender or property owner may be taken into account.

At step 206, the investments are evaluated based on the risk analysisframework and the collected data. As previously indicated, theinvestment rating engine 117 may generate an overall evaluation of riskassociated with an investment and/or generate flags or trips associatedwith specific issues that raise concern. In the exemplary embodiment,the investment rating engine 117 generates both an overall score andtrips. An asset manager may then review the data that went intogenerating the score, review the trips, and provide operator inputs tomodify the system-generated overall score upwardly or downwardly asdeemed necessary. In this arrangement, it is assumed that the assetmanager may have more complete information than the system 10 inasmuchas, for troubled properties, the asset manager is likely to be in directand frequent contact with the property owner. Alternatively, the assetmanager may be able to detect limitations in the data available to theinvestment rating engine 117 or the rating methodology used by theinvestment rating engine 117 that are causing the investment ratingengine to provide an inaccurate score.

For example, the asset manager may determine that the system-generatedscore is too high because it does not adequately reflect the riskassociated with a trip that occurred. Alternatively, the asset managermay decide that the system-generated score is too low due to an anomalyin the data, e.g., the investment is being overly penalized for missingdata. Alternatively, the asset manager may simply determine that thesystem-generated score is accurate. Once an overall score has beengenerated and approved by the asset manager (with or withoutmodification), this score may then be provided as an output to othersystems for loss forecasting, early warning analysis, and so on.

In one embodiment, a risk profile identification is stored for eachinvestment. When the investment rating engine 117 is executed togenerate scores for a particular risk profile, the investment ratingengine 117 ascertains which investments are to be rated according to theparticular risk profile and generates scores for those investments.According to other embodiments, multiple scores may be generated usingmultiple risk profiles for each investment. In this arrangement, aninvestment having two different risk profiles and debt coverage ratioprofiles will not be treated in the same way by the investment ratingengine 117. Instead, the investment is considered as two differententities producing different sets of scores.

The investment rating engine 117 may also be used to provide a workflowmanagement tool for asset managers of the investor. The investmentrating engine may be used by asset managers to help them prioritizetheir asset management and loss mitigation activities by identifyingthose properties that are at a greater risk for default. For example, asdetailed below, if the system-generated score is below a predeterminedlevel, the asset manager may be required to review the investment leveldata for the investment with the low score. Additionally, the assetmanager may be required to review the investment level data inconnection with any trips that occur. The output of the investmentrating engine 117 may also be used to generate a list of tasks to beperformed by an asset manager in connection with a troubled investment.

According to an exemplary embodiment, the investment rating engine 117may evaluate investments on an ongoing basis, either automatically orresponsive to user inputs. For example, the investment rating engine 117may be run for each of the following events: (1) a pre-defined riskanalysis profile has been changed (e.g., changes to the weighting,category or subcategory classification, scale, etc.) and an investmentneeds to be rated based on the changed framework; (2) investment detailsor other data have been updated in a data repository (e.g., updatedfinancial performance information is received for one or more investmentproperties); and (3) other enhancements to the investment rating engine117 have been implemented. For example, the investment rating engine 117may be run on a periodic basis (e.g., monthly, quarterly, yearly, etc.)when results from a particular investment are received. Each time therating engine runs, a new set of scores are obtained. The date and timeare stamped on the data each time the engine runs to generate a new setof scores. Old data is retained so that the history of how an investmentwas rated by the investment rating engine 117 over time may be viewed,e.g., to assess performance of the investment rating engine 117 andasset managers in connection with investments that ultimately failed andimplement improvements/modifications to the investment rating engine 117or practices of asset managers as deemed necessary.

It may also be noted that the steps 202-206 need not be performed in anyparticular order. For example, steps 202-206 may be performediteratively throughout the life of an investment. For example, severalyears into an investment, it may be determined that the risk profileused to evaluate the investment (step 206) does not accuratelycharacterize a particular source of risk. Accordingly, based on thisfeedback, the risk profile may be modified (step 202) and used incombination with new and/or previously collected data (step 204) toperform more accurate evaluations.

Although a number of features have been mentioned above and furtherfeatures are mentioned below, it should be noted that it is possible toimplement the system 10 in such a manner that only some of thesefeatures are included. Additional, different, or fewer features may alsobe included.

II. Operator Interface

Referring to FIGS. 3-26, a preferred embodiment of user interface logic115 as well as additional details regarding operation of the investmentrating engine 117 will now be described. User interface logic 115 isconfigured to provide a series of linked interactive screens which allowfor the acquisition and display of data relating to one or moremulti-family housing investments. According to an alternativeembodiment, other programs or graphical user interfaces which allow userinteraction, data entry and user commands may be used. It should benoted at the outset that the arrangement, order and configuration of theuser interface including various screens may be altered, changed orotherwise varied.

FIGS. 3-26 show different screens displayed to an operator by the userinterface logic 115. FIG. 3 depicts an introductory screen 601 a whichincludes buttons 130-134 which allow the user to access differentaspects of the investment rating engine 117 associated with differenttypes of investments, including debt investments (button 130), equityinvestments (button 132) and bond investments (button 134). Aspreviously noted, the investment rating engine 117 preferably may beused in connection with each of these different types of investments.For example, by pressing the debt button 132 (e.g., using a mouse orother suitable operator input device), the user may perform variousactivities in connection with debt investments, adjust risk analysisprofiles, create new profiles, view results of analysis performed by theinvestment rating engine 117, access financial performance and otherdata for debt investments, and so on. Likewise, by pressing the equitybutton 134 or the bond button 136, the user may access the same orsimilar functionality for equity investments or bond investments. Forsimplicity, the remainder of this disclosure will focus on debt-basedinvestments; however, it should be noted that equity-based andbond-based investments may be implemented in the same or similar manner.

A. Framework Setup Interface

In general, to set up the framework or to view results of financialanalysis performed by the rating engine 117 for rating a debt-basedinvestment, a user first selects the debt button 130 on the screen 601 ashown in FIG. 3. The user is then taken to screen 601 b shown in FIG. 4.FIG. 4 shows a screen 601 b where a user may make selections includingview/maintain product risk profiles (button 102), view/maintain themaster scale (button 104), view/maintain the debt service coverage ratio(DSCR) profile (button 106), and review debt historical rating results(button 108).

For example, if the user selects button 102 to view/maintain productprofiles, then field 102 a and button 102 b become active and allow theuser to view an existing risk profile or to add new risk profile. Bymaking a selection to add a new product risk profile (button 102 b), auser is taken to screen 601 c shown in FIG. 5. Referring to FIG. 5,screen 601 c is shown according to an exemplary embodiment. Screen 601 cprovides an interface for receiving information to add a new riskprofile template. A new risk profile template is added by providing afield to receive a user-specified name for the new risk profile template(field 302), a field to receive a user-specified description for the newrisk profile template (field 304), and a field to receive a name ofexisting template which is to serve as a base for developing the newtemplate (field 306). Each new risk profile template that is created maybe based on an existing risk profile template. Any changes made to theexisting or the newly created risk profile template are stored in a datastore (e.g., database 116 shown in FIG. 1).

FIG. 6 shows screen 601 d which illustrates an example of a product riskprofile. A screen such as screen 601 d may be shown whenviewing/modifying an existing profile or when creating a new riskprofile based on an existing profile. Screen 601 d shows a product riskprofile which has been named “DUS Base” as indicated in field 202 andwhich has been described as “Default Risk Profile Type” in field 204.

Screen 601 d displays the weighting values in fields 206 applied tovarious defined categories of data 208 used to create the risk profile.The categories of data relate to different types of risk that isencountered for each investment. The categories includefinancials/operations, debt coverage ratio, current loan-to-value (LTV),refinance risk, market, property condition, property management,sponsor, and customer. To produce the overall system-generated score fora particular investment based on a particular risk profile, a score isgenerated for each of the categories 208, and the overallsystem-generated score is calculated as the combination (e.g., weightedaverage) of the scores for the categories 208 weighted in accordancewith the weighting values in fields 206.

A user may update or modify the category weighting preferences in fields206 as applicable to the particular investment (or investment class orsubclass for which the risk analysis profile is being created).Specifically, by entering a new number in a field 206, the weightinggiven to a particular category of financial performance data (e.g.,“financial/operations”) may be modified. Accordingly, any number ofdifferent risk profiles may be constructed each having differentweightings in fields 206 for the various categories 208. Any change thatis made to the weighting is stored in the data store (e.g., database 116shown in FIG. 1). Each category may potentially receive a differentrating in field 206 but the total weighting for all of the categoriessums to 100% as shown in field 209. According to an exemplaryembodiment, the system 10 is configured to automatically ensure that thetotal of all category weighting equals 100% (field 209). To the extentthat there is any discrepancy in the data entry (e.g., deviation from acategory weighting total of 100%), the system 10 preferably prevents theuser from proceeding until the weighting distribution is corrected.

A column of buttons 211 is provided that are each labeled “Scale” andthat are placed in line with the categories 208. The buttons 211 arerespectively associated with the categories 208. By pressing arespective button 211, a user may drill down on any of the categories208 to modify the manner in which a score is generated for a particularcategory. In FIG. 6, the user has pressed the button 211 associated withthe financials/operations category 208, and so additional information isprovided on the right side of screen 601 d regarding the manner in whichthe score for the financials/operations category 208 is generated.

Window 210 in screen 601 d indicates that the financials/operationsscore is generated based on a number of subcategories, includingeconomic occupancy, expense ratio management, NOI growth trend, net cashflow trend, and capital expenditure. To produce the financial/operationsscore, a score is generated for each of the subcategories shown inwindow 210, and the financial/operations score is calculated as thecombination (e.g., weighted average) of the scores for the subcategoriesweighted in accordance with the weighting values shown in window 210. Inone embodiment, the various scores for the subcategories are calculatedfirst (e.g., by separate computational modules), and then used (e.g., byan additional computation module) to generate the overall score for theinvestment. It will appreciated that additional scores for additionalsubcategories may be calculated, allowing as much data to be taken intoaccount in the rating process as desired. The subcategories allowvarious types of data within a given category to be taken into accountin the rating process, and thereby provide additional depth andgranularity to the rating process and ultimately increase the accuracyfor rating an investment.

The user may again adjust the weightings to the various subcategoriesset forth in window 210. Again, the system 10 preferably operates toensure that the weightings for the different categories sums to 100%.Again, the weightings for the various subcategories set forth in window210 may be set different for each risk profile that is created.

A user may select any of the subcategories within window 210 for a moredetailed view of the manner in which the score is generated for thatparticular subcategory. For example, window 212, which is provided inresponse to user-selection of button 213, shows the manner in which ascore is generated for the EGI Trend category in greater detail. It willbe appreciated that additional information regarding the manner in whicha score is generated for the other subcategories (expense ratiomanagement, NOI growth trend, net cash flow trend, and capitalexpenditure) is depicted if other ones of the buttons shown in window212 are pressed. As shown in window 212, the EGI Trend is assigned ascore of 25, 50, 75, or 100 depending on how current occupancy comparesto what was predicted during underwriting.

As shown by fields 214, trips can be set up to flag when a particularcategory or risk level needs to be analyzed further. For example, in therisk profile set forth in FIG. 6, no trips are set up. If the setting infield 216 is changed from “no” to “yes”, then a trip will occur when theinvestment rating engine 117 runs if the EGI trend drops to a valuewhich results in a score of 25 or less. If it is also desired for thetrip to occur when the EGI trend level drops to a level of 50 or below,then the setting in field 217 may be changed from “no” to “yes” as well.Like the weightings for the various categories 208 and the varioussubcategories shown in window 210, the trips may be configureddifferently for each risk profile that is created. Whereas thesystem-generated score provides an overall indication of the riskassociated with a particular investment, the trips provide flagsregarding more specific issues which may cause an investment to fail.Advantageously, the trips allow such issues to be detected even thoughthe effect of such issues on the overall score may be diluted by thenumerous other factors that are used in generating the overall score.

FIGS. 7-14 provide additional examples of screens that may be providedin connection with additional ones of the top-level categories 208 ofFIG. 6. Again, the parameters shown in the screens in FIGS. 7-14 may bemodified responsive to user inputs to create different weightings,scales, trips, etc., in connection with different risk profiles.

FIG. 7 shows screen 601 e which illustrates an example of additionaldetails of the Loan to Value (LTV) category. A user may select the scalebutton 401 to open a current LTV scale window 403. Once this window boxis opened, the user may edit scaling values (fields 405) and configuretrip settings as desired. According to what is shown in FIG. 7, thecurrent LTV score is assigned a value of 100 if the LTV is less than orequal to 80%, is assigned a value of 75 if the LTV is greater than 80%but less than or equal to 85%, is assigned a value of 50 if the LTV isgreater than 85% but less than or equal to 95%, and is assigned a valueof 25 if the LTV is greater than 95%. The system is not configured togenerated trips based on an LTV that is too high (each of the tripfields is set to “No”), however, the trip fields could be modified ifsuch trips were desired.

FIG. 8 shows screen 601 f which illustrates an example of additionaldetails of the refinance risk category. A user may select the scalebutton 411 to open the refinance risk scale window 413. Once this windowis opened, the user may edit scale settings (fields 415) and configuretrip settings as desired.

FIG. 9 shows screen 601 g which illustrates an example of additionaldetails of the market category. A user may select the scale button 421to open the market scale windows 423 and 424. The market scale includesan REIS market data window 423 and a market scoring grid window 424. Thewindow 423 shows scores assigned to various geographic markets by thethird party data source. The third party source gives each geographicmarket a score having one of four values (shown as green, yellow, orangeor red). The scoring grid window 424 shows how each of these values isconverted to a numeric score (25, 50, 75, or 100). Once the market scaleis opened, the user may edit the scale values and configure tripsettings in window 424 as desired. It will be appreciated that, althoughonly a small number of geographic markets are shown in FIG. 9, data ispreferably received from the third party data source for all geographicmarkets in which properties underlying the investments underconsideration are located.

FIG. 10 provide sections of screen 601 h which illustrate additionaldetails of the property condition category. A user may select the scalebutton 441 to open the property scale window (shown as field 443). Oncethis box is opened, the user may edit the weighting values (fields 445)in the summary section window 446. Summary window 446 indicatessubcategories of the property condition category, including an exteriorand structural condition, interior conditions, site and amenities,mechanical systems, and overall conditions. In FIG. 10, the user haspressed the exterior and structural button below window 446, and thusthe remainder of FIG. 10 show additional details regarding the factorsthat go into generation of the score for the exterior and structuresubcategory. It will be appreciated that, if the user presses one of theother three buttons, additional information regarding the factors thatgo into generation of the score for one of the other subcategories(interior conditions, site and amenities, mechanical systems, andoverall conditions) will be shown. The exterior and structuralsubcategory may include factors such as foundation/crawl area,patio/balcony, roofing, structure/floor, building exterior, interiorconditions, appliances, common areas, exterior/interior stairs, buildinginterior, etc. The site and amenities subcategory may include factorssuch as site and amenities, landscaping, parking/paving, recreationalfacilities, sidewalks, site drainage, site lighting, retaining wall,etc. The mechanical systems subcategory may include factors such aselevators, HVAC, electrical/plumbing, etc.

The data for the property condition category may come from a propertyinspection. For example, for each of the factors mentioned above, theinspector may assign a score such as excellent, good, satisfactory,unsatisfactory, poor, or not applicable. The scoring response grid shownin window 447 shows how each of the inspector-assigned scores isconverted to a numeric value. As also shown in window 447, if thecondition is rated as either unsatisfactory or poor, a trip will begenerated during execution of the investment rating engine 117.

FIGS. 11A and 11B show screens 601 i and 601 j which illustrate examplesof additional details of the property management category. A user mayselect the scale button 461 to open the current property managementscale window 463. Once this box is opened, the user may edit theweighting values (fields 465) and click on individual categories forstaffing adequacy (button 467) and management competence (button 469).The staffing adequacy window 471 is shown in screen 601 i, and allows auser to edit the scaling values and configure trip settings as desired.For example, with the settings of FIG. 11A, a score of 100 will be givenif there is more than one full time equivalent (FTE) staff member per 50housing units. Again, it is possible to change the scale for each riskprofile. For example, it may be expected that assisted-living housingmay have higher staff-to-unit ratio than other types of housing, andscreen 601 i allows different risk profiles to be created that allowthese variations to be taken into account. the Screen 601 j illustratesthe management competence/expertise window 473 which allows a user toedit the scaling values and configure trip settings as desired.

FIG. 12 provides screen 601 k which illustrates an example of additionaldetails of the sponsor category. A user may select the scale button 481to open the sponsor scale box (shown as field 483). Once this box isopened, the user may edit the scaling values (fields 485) and configuretrip settings as desired.

FIG. 13 provides screen 601 l which illustrates an example of additionaldetails of the customer category. A user may select the scale button 491to open the current customer scale window 493. The Customer scale window493 includes a section weighting window 495, a customer scoring window496, and a detailed listing of scores of particular lenders (window498). The section weighting window 493 allows the user to edit theweighting applied to three different subcategories including postpurchase review assessment, operations assessment, and asset managementassessment (e.g., a user may edit the weighting applied to one or moreassessment categories). Accordingly, a user may edit the weightingvalues (fields 499) and configure trip settings as desired.

Referring back to FIG. 4, by choosing to view/maintain the master scale(button 104), a user is taken to the screen 601 m shown in FIG. 14.Referring to screen 601 m, value ranges may generally be defined foreach of the overall rating categories (fields 340). When the investmentrating engine 117 generates a score for a particular category orsubcategory, and the score is displayed to an operator, the score ispreferably color-coded in accordance with the scale shown in FIG. 14 forease of viewing. The scale defined in fields 340 for identifying therating categories acts as the master for all rating enginedeterminations. According to an exemplary embodiment, four ratingcategories (fields 340) are defined, including “green,” “yellow,”“orange,” or “red.” The green rating indicates that acategory/subcategory is performing at or above original expectations.The yellow rating indicates that a category/subcategory is performingsatisfactorily, however, there may be some indication of stress. Anasset (or investment) manager may or should be engaged with the lenderin connection with this category/subcategory. The orange ratingindicates that a category/subcategory is somewhat troublesome and anasset manager may or should be actively partnering with the lender forsolutions. The red rating indicates that a category/subcategory needssignificant corrective action to prevent loss. The user may also beprovided with the ability to add or delete rating categories (e.g., todefine six levels instead of four so that ratings are displayed at ahigher level of granularity). According to alternative embodiments, anynumber of other and/or additional categories may be used to classify theinvestments (e.g., different color schemes, value ranges, numbers,letters, names, etc.).

Referring back to FIG. 4, a new debt coverage ratio profile can be addedin a similar manner as described above with respect to new risk profiletemplates. It may be noted that, in FIG. 6, no scale button is providednext to the debt coverage ratio category. Configuration of the debtcoverage ratio category occurs by way of the view/maintain DSCR button106 in FIG. 4. As with the product risk profile, a new DSCR profile maybe created based on an existing DSCR profile.

Referring to FIG. 15, screen 601 n is shown according to an exemplaryembodiment. Screen 601 n may be used to provide an interface for addinga new DSCR risk profile. A new risk profile template is added byreceiving a user-specified name for the new DSCR profile (field 160),receiving a user-specified description for the new DSCR profile (field162), and receiving an identification of an existing profile from whichthe weighting details are to be copied from (field 164).

FIGS. 16-17 provide screen 601 o and 601 p which may be used inconnection with displaying existing DSCR profiles or facilitatingcreation of new DSCR risk profiles. In FIG. 16, screen 601 o shows aDSCR profile which has been named DUS DC Base as shown in field 180 aand which has been described as a default debt coverage profile as shownin field 180 b. With the settings as shown in FIG. 16, a DSCR ratiogreater than or equal to 1.25 yields a score of 100, a DSCR ratiogreater than or equal to 1.15 but less than 1.25 yields a score of 75, aDSCR ratio greater than or equal to 1.05 but less than 1.15 yields ascore of 50, and a DSCR ratio less than 1.05 yields a score of 25 andalso causes a trip to be generated. Again, either the scales or the tripsettings may be adjusted. By adjusting the trip settings to includeadditional trips, for example, the trips may also be generated at otherlevels (e.g., below 1.15, below 1.25).

FIG. 17 provides screen 601 p which shows a DSCR profile which has beennamed DUS DC COOP as indicated by field 180 b and which has beendescribed as a risk profile for DUS Coop loans. Coop loans are typicallyexpected to have lower DSCR ratios, as indicated by the scaling in FIG.17. It may also be noted that the profile in FIG. 17 has more scalelevels (seven as compared to four in FIG. 16). Accordingly, the scalingis adjustable not only in the thresholds that are used but also in thenumber of ranges that are used. Although not specifically shownelsewhere, the same arrangement is used for other categories andsubcategories in which scales are used.

B. Rating Engine Results Interface and Workflow Interface

After the investment rating engine 117 rates the investments in thedatabase 116, the user may be presented with historical rating engineresults as shown in FIGS. 18A-18C, 19, 20A-20B, 21 and 22 which areaccessible to the user via button 108 in screen 601 b of FIG. 4. Rundate and time and product risk profile selections may be received fromthe user via fields 113 and 117, respectively. After receiving theseselections, the system generates the graphical summary representation ofhistorical rating results for the date and time selected and for therisk profile selected, as shown in FIGS. 18A-18C.

FIG. 18A shows graphical representations of the overall score graph 203and operations/financials score graph 205. FIG. 18B shows graphicalrepresentations for property condition 207, debt coverage ratio score213, sponsor score 209, and current LTV score 211. FIG. 18C showsgraphical representations for market score 215, refinance risk score217, customer score 219, and property management score 221.

FIG. 18A also shows a missing data summary by category. For eachcategory, the number of loans with partial and full data is shown.Depending on how missing data is treated, missing data may result inlower scores for the associated categories and subcategories.Accordingly, presenting the user with a missing data summary enables theuser to understand the reason as to why the investment may have beenscored high or low or average by the investment rating engine 117.

A user is also provided with the ability to drill down on the data for aparticular one of the summary graphs 203-221 by pressing a review scorebutton 207 associated with each graph. For example, if the user pressesthe review score button 207 for the overall score summary graph 203, theuser is taken to a screen 601 t shown in FIG. 19. FIG. 19 shows scoresgenerated by the investment rating engine 117 for a portfolio of loanson a loan-by-loan and category-by-category. (Although only a limitednumber of loans is shown in FIG. 19, the dashed arrows indicate that thelist of loans may be much longer than what is shown in FIG. 19.) Eachscore is presented as a numeric score and is presented in a box which iscolor coded in accordance with the master scale of FIG. 14. For example,where a particular category received a score of 100, the 100 isdisplayed in a box which is generally green except for where the number100 is displayed. This feature simplifies the presentation of thesummary information and allows a user to quickly focus on those loansthat scored poorly and also obtain an overall assessment of how variousloans performed in various categories. Also displayed for each loan is afield indicating whether any trips occurred.

A user is also provided with the ability to drill down on a particularloan by pressing the “+” button 223 associated with a particular loan ofinterest. If the user presses button 223 for a particular loan, the useris presented with data such as shown in screens 601 u, 600 v, and 600 wof FIGS. 20A-20C. In FIG. 20A, the user is shown the weighting given toeach category for the particular risk profile used to generate the score(for informational purposes), the system-generated score for eachcategory, and the asset manager score for each category. As previouslynoted, the asset manager has the ability to override thesystem-generated score. Also shown are fields for system-generatedcomments and asset manager comments for each category. For example, forthe sponsor category, the system-generated comments indicate that ascore of zero was received because of missing data. In the lower portionof FIG. 20A, screen 601 u indicates that a trip was generated due torefinance risk.

In FIGS. 20B and 20C, additional information is provided for the loanfor each of the categories 208. Also shown is the weighting provided toeach category. The weighting is provided for informational purposes andthe user does not have the ability to adjust the weighting in screens601 u, 600 v, and 600 w. The data used by the investment rating engine117 to generate the scores is also shown in screens 601 u, 600 v, and600 w.

Referring again to FIGS. 18A-18C, as another example, if the userpresses the review scores button 207 for the operations/financialscategory, the user is taken to screen 601 x shown in FIG. 21. FIG. 21shows a detailed listing of loans along with a detailed showing of datathat went into generating the operations/financials score for each loan.As another example, if the user presses the review scores button 207 inFIG. 18B for the debt service coverage ratio category, the user is takento screen 601 y shown in FIG. 22. FIG. 22 shows a detailed listing ofloans along with a detailed showing of data that went into generatingthe debt service coverage ratio score for each loan.

Referring now to FIGS. 23-26, the investment rating engine 117 may beused by asset managers as a workflow management tool. FIG. 23 shows aportfolio of loans which may be managed by one or more asset managers.An asset manager is provided with the ability to filter or sort theloans by any field, such as the review status field, the asset managerfield, the trip field, or the overall rating field. In FIG. 23, theloans are depicted as being sorted by review status. As a workflowmanagement tool, the system 10 is used to ensure that each loan isreviewed by an asset manager, including ensuring that any trips areaddressed and that the system-generated score is reviewed and approved(either with or without modification). The system 10 is configured torequire that trips be affirmatively addressed by the asset manager, andthe interface includes fields associated with each trip to receiveconfirmation that the respective trip has been addressed. The reviewstatus indicator in FIG. 23 indicates whether a particular loan has beenreviewed or remains open. It may be noted that the list of open loans isdisplayed from worst (loans with the lowest overall rating) to best(loans with the highest overall rating). This allows the asset managerto quickly identify the worst loan that remains open and startactivities with that loan.

The loan rating graph button 240 and the loan rating detail button 242may be pressed by the user to receive information as discussed above inconnection with FIGS. 18A-18C, 19, 20A-20B, 21 and 22. As shown in FIGS.24-26, the asset manager may drill down on a particular loan and beprovided with more detailed information via screens 601 aa-601 cc.Again, the asset manager can see the weighting that were used togenerate scores but does not have the ability to modify them in screens601 aa-601 cc. The asset manager can modify system-generated scores. Theasset manager is provided with the ability to review recent financialstatements (via a financial statements button) from the lender orproperty owner which may provide textual explanations for the data whichresult in upward or downward revisions of the data. The asset manager isalso provided with the ability to review results of inspections (via aninspections button).

As shown in FIG. 24, an action plan/watchlist button 250 provides a linkto an action plan and watchlist for troubled assets. The action planincludes a summary of any problems associated with the investment, anyremedial action that the lender is taking, and any additional commentsand other tasks that may need to be performed on either the lender orthe investor side to return the loan to a more favorable status. Theoutput of the investment rating engine 117 may also be used to generatea list of tasks to be performed by an asset manager in connection with atroubled investment. The system 10 can manage the list of tasks to beperformed by an asset manager (e.g., categorized by loan, prioritized byimportance, and so on). The watchlist is driven by the investment ratingengine 117 and includes investments across all asset classes for eachlender. If the overall score is less than green, the loan is added tothe watch list and an action plan is created to return the investment toa more favorable status. A tool may be provided to address routinetasks.

As shown in FIG. 26, loss forecasting information may also be provided.In the illustrated embodiment, loss forecasting on a loan-by-loan basisis performed only for loans with a red overall rating. A separate,portfolio-level loss forecasting may be performed for loans with ayellow or orange overall rating. Alternatively, loss forecasting on aloan-by-loan basis may also be performed for loans with a yellow ororange overall rating.

The investment rating engine 117 may be implemented by the logic shownas deal management logic 110, data management logic 112, and trendingand analysis logic 114 in “System and Method for Managing DataPertaining to a Plurality of Financial Assets for Multifamily andHousing Development” Ser. No. 11/026,102, filed simultaneously herewith,and hereby incorporated by reference. In this configuration, the userinterface logic 115 and the database 116 of the system described hereinmay be implemented by the user interface logic 106 and the database 118,respectively, of the system described in the aforementioned application.Likewise, the data received from the counterparty data sources 120 maybe processed by the cash flow management logic 116.

Although the investment rating engine 117 has been described in thecontext of multifamily investments, it will appreciated that theinvestment rating engine 117 may also be used in connection with othertypes of investments. For example, the techniques described herein inconnection with the investment rating engine 117 could also be used inconnection with single family loans, commercial loans, and so on.

The investment rating engine 117 may also be used to rate potentialinvestments. For example, the investment rating engine 117 may be usedto implement an automated underwriting engine for evaluating potentialnew investments. In this configuration, assumptions may be maderegarding financial operations and other parameters used to generate aloan rating. These assumptions may then be used as input data into theinvestment rating engine 117. The investment rating engine 117 thenreturns a score for the investment based on the assumptions, allowing anassessment to be obtained as to the risk of an investment (e.g.,relative to other investments of the same type) assuming all of theassumptions are correct.

The invention is described herein with reference to drawings. Thesedrawings illustrate certain details of specific embodiments thatimplement the systems and methods and programs of the present invention.However, describing the invention with drawings should not be construedas imposing on the invention any limitations that may be present in thedrawings. The present invention contemplates methods, systems andprogram products on any machine-readable media for accomplishing itsoperations. The embodiments of the present invention may be implementedusing an existing computer processor, or by a special purpose computerprocessor incorporated for this or another purpose or by a hardwiredsystem.

As noted above, embodiments within the scope of the present inventioninclude program products comprising machine-readable media for carryingor having machine-executable instructions or data structures storedthereon. Such machine-readable media can be any available media whichcan be accessed by a general purpose or special purpose computer orother machine with a processor. By way of example, such machine-readablemedia can comprise RAM, ROM, EPROM, EEPROM, CD-ROM or other optical diskstorage, magnetic disk storage or other magnetic storage devices, or anyother medium which can be used to carry or store desired program code inthe form of machine-executable instructions or data structures and whichcan be accessed by a general purpose or special purpose computer orother machine with a processor. When information is transferred orprovided over a network or another communications connection (eitherhardwired, wireless, or a combination of hardwired or wireless) to amachine, the machine properly views the connection as a machine-readablemedium. Thus, any such a connection is properly termed amachine-readable medium. Combinations of the above are also includedwithin the scope of machine-readable media. Machine-executableinstructions comprise, for example, instructions and data which cause ageneral purpose computer, special purpose computer, or special purposeprocessing machines to perform a certain function or group of functions.

Embodiments of the invention are described in the general context ofmethod steps which may be implemented in one embodiment by a programproduct including machine-executable instructions, such as program code,for example in the form of program modules executed by machines innetworked environments. Generally, program modules include routines,programs, objects, components, data structures, etc. that performparticular tasks or implement particular abstract data types.Machine-executable instructions, associated data structures, and programmodules represent examples of program code for executing steps of themethods disclosed herein. The particular sequence of such executableinstructions or associated data structures represent examples ofcorresponding acts for implementing the functions described in suchsteps.

Embodiments of the present invention may be practiced in a networkedenvironment using logical connections to one or more remote computershaving processors. Logical connections may include a local area network(LAN) and a wide area network (WAN) that are presented here by way ofexample and not limitation. Such networking environments are commonplacein office-wide or enterprise-wide computer networks, intranets and theInternet and may use a wide variety of different communicationprotocols. Those skilled in the art will appreciate that such networkcomputing environments will typically encompass many types of computersystem configurations, including personal computers, hand-held devices,multi-processor systems, microprocessor-based or programmable consumerelectronics, network PCs, minicomputers, mainframe computers, and thelike. Embodiments of the invention may also be practiced in distributedcomputing environments where tasks are performed by local and remoteprocessing devices that are linked (either by hardwired links, wirelesslinks, or by a combination of hardwired or wireless links) through acommunications network. In a distributed computing environment, programmodules may be located in both local and remote memory storage devices.

An exemplary system for implementing the overall system or portions ofthe invention might include a general purpose computing device in theform of a computer, including a processing unit, a system memory, and asystem bus that couples various system components including the systemmemory to the processing unit. The system memory may include read onlymemory (ROM) and random access memory (RAM). The computer may alsoinclude a magnetic hard disk drive for reading from and writing to amagnetic hard disk, a magnetic disk drive for reading from or writing toa removable magnetic disk, and an optical disk drive for reading from orwriting to a removable optical disk such as a CD-ROM or other opticalmedia. The drives and their associated machine-readable media providenonvolatile storage of machine-executable instructions, data structures,program modules and other data for the computer.

It should be noted that although flow charts may be provided hereinshowing a specific order of method steps, it is understood that theorder of these steps may differ from what is depicted. Also two or moresteps may be performed concurrently or with partial concurrence. Suchvariation will depend on the software and hardware systems chosen and ondesigner choice. It is understood that all such variations are withinthe scope of the invention. Likewise, software and web implementationsof the present invention could be accomplished with standard programmingtechniques with rule based logic and other logic to accomplish thevarious database searching steps, correlation steps, comparison stepsand decision steps. It should also be noted that the word “component” asused herein and/or in the claims is intended to encompassimplementations using one or more lines of software code, and/orhardware implementations, and/or equipment for receiving manual inputs.

The foregoing description of embodiments of the invention has beenpresented for purposes of illustration and description. It is notintended to be exhaustive or to limit the invention to the precise formdisclosed, and modifications and variations are possible in light of theabove teachings or may be acquired from practice of the invention. Theembodiments were chosen and described in order to explain the principalsof the invention and its practical application to enable one skilled inthe art to utilize the invention in various embodiments and with variousmodifications as are suited to the particular use contemplated.

It is important to note that the above-described embodiments areillustrative only. Although the invention has been described inconjunction with specific embodiments thereof, those skilled in the artwill appreciate that numerous modifications are possible withoutmaterially departing from the novel teachings and advantages of thesubject matter described herein. Accordingly, these and all other suchmodifications are intended to be included within the scope of thepresent invention as defined in the appended claims. The order orsequence of any process or method steps may be varied or re-sequencedaccording to alternative embodiments. In the claims, anymeans-plus-function clause is intended to cover the structures describedherein as performing the recited function and not only structuralequivalents but also equivalent structures. Other substitutions,modifications, changes and omissions may be made in the design,operating conditions and arrangements of the preferred and otherexemplary embodiments without departing from the spirit of the presentinvention.

1. A property investment management system comprising: machine-readablemedia having machine-executable instructions stored therein; a machineincluding a processor that reads and executes the instructions stored inthe machine-readable media, the machine and the machine-readable mediain combination implementing; user interface logic that provides a userinterface accessible to a user, the user interface logic including riskprofile configuration logic used by the user to define a plurality ofdifferent risk profiles related to property-related investments and riskfactors associated with such investments; an investment rating enginecoupled to the user interface logic, the investment rating engine beingconfigured to evaluate the property-related investments according to theplurality of different risk profiles; wherein the investment ratingengine retrieves data from one or more external sources, the externalsources being at least one of (i) credit information and (ii) propertyvaluation data; wherein the investment rating engine triggers one ormore trips based on the evaluation of the specific risk profile and riskfactors related to a particular investment; wherein the plurality ofdifferent risk profiles provide different weightings to the differentcategories of data, and wherein the risk profiles are configurableaccording to the nature of the risks associated with the different onesof the property-related investments; and wherein the investment ratingengine generates a rating for each investment, and wherein theinvestment rating engine outputs a list of tasks based on the rating toa workflow management tool.
 2. The system of claim 1, wherein the riskfactors include at least one of (i) the historic financial performanceof the property, (ii) the property condition details, (iii) the value ofthe property or properties serving as collateral, (iv) the creditinformation of the property owner, and (v) the credit information of thelender.
 3. The system of claim 1, wherein the investment rating engineevaluates the investments based on a plurality of categories of data,and wherein the plurality of different risk profiles provide differentscaling for the different categories of data.
 4. The system of claim 1,wherein the investment rating engine evaluates the investments based ona plurality of categories of data, wherein the investment rating enginegenerates the one or more trips based on the plurality of categories ofdata, and wherein trip settings for the trips are separatelyconfigurable for the plurality of different risk profiles.
 5. The systemof claim 1, further comprising a workflow management interface logic,the workflow management interface logic receiving from the investmentrating engine at least one of (i) the list of tasks, (ii) details of theone or more trips, (iii) the risk profiles, and (iv) the risk factors.6. The system of claim 5, wherein the workflow management interfacelogic places investments on a watch list of troubled investments basedon output of the investment rating engine.
 7. The system of claim 5,wherein the workflow management interface logic tracks status of the oneor more trips generated for investments by the investment rating engine,including whether an asset manager has reviewed the trip.
 8. The systemof claim 5, wherein the workflow management interface logic maintains awatch list of troubled investments and action plans for investments onthe watch list of troubled investments.
 9. The system of claim 5,wherein the workflow management interface logic assists asset managersby prioritizing asset management and loss mitigation activities byidentifying those properties that are at a greater risk for default. 10.The system of claim 1, wherein the user interface logic provides anasset manager with an option to override the rating.
 11. The system ofclaim 10, wherein the rating is provided to a loss forecasting engineand is used to perform loss forecasting.
 12. The system of claim 1,wherein at least a portion of the data is received from third parties.13. The system of claim 1, wherein the property-related investmentsinclude debt-based investments, equity-based investments, and bond-basedinvestments.
 14. The system of claim 1, wherein the property-relatedinvestments are existing investments.
 15. The system of claim 1, whereinthe investment rating engine generates an overall evaluation of riskassociated with the plurality of different investments.
 16. The systemof claim 1, wherein the investment rating engine generates the one ormore trips based on specific issues of concern in connection with theproperty related investments.
 17. The system of claim 1, wherein theinvestment rating engine assigns at least one investment into one of aplurality of discrete risk categories based on the evaluation.
 18. Acomputer-implemented method of providing risk information regardingproperty investments comprising: receiving, by user interface logic,investment information that relates to various characteristics of theproperty investments that are currently managed, the user interfacelogic being implemented by machine-readable media havingmachine-executable instructions stored therein and by a machineincluding a processor that reads and executes the instructions stored inthe machine-readable media; generating, by an investment rating engine,a risk level determination for the property investments based on one ofa plurality of different stored risk profiles, wherein the investmentrating engine is implemented by the machine and the machine-readablemedia, and wherein the plurality of different risk profiles providedifferent weightings to the different categories of data; wherein therisk profiles are configurable according to the nature of the risksassociated with the different ones of the plurality of investments;evaluating, by the investment rating engine, the property investmentsaccording to the plurality of risk profiles; displaying the risk leveldetermination; triggering, by the investment rating engine, a trip usingthe investment rating engine based on the evaluation of the specificrisk profile and risk factors related to a particular investment; andoutputting the trip to the user interface logic to implement a workflowmanagement tool, the trip flagging an issue for further review by theuser.
 19. The method of claim 18, further comprising providing overallresults of the risk level determination.